In the United States, Tesla may be at the forefront of the electric vehicle revolution, but abroad, the automaker faces some serious competition. In China, the world's largest electric car market, Tesla has lost ground to local automakers that are increasingly making better cars at unbeatable prices, the most important of which is the Warren Buffett-backed company. BYD.
In the last quarter of 2023, BYD dethroned Tesla as the world's largest electric car maker, selling more battery-powered vehicles than its American competitor.
“BYD has grown into this force in the new energy vehicle industry,” said CNBC's Beijing correspondent Evelyn Cheng. “When you look at the monthly rankings, they are always at the top.”
BYD, founded by Wang Quanfu, began manufacturing mobile phone batteries in the 1990s. By 2003, the company had pivoted to cars and has since become the number one automobile brand in China, as well as a major producer of electric vehicle batteries.
“It's one of the largest companies in the world that makes lithium iron phosphate batteries,” Sam Abu Al-Samid, principal analyst at Guidehouse Insights, told CNBC. He also explained the advantages of lithium-ion batteries, saying they are long-lasting and “cost 30-40% less to manufacture per kilowatt-hour.”
Part of BYD's mass appeal is the price. Many of its cars undercut the competition, with many models starting at less than $20,000.
“In Munich just a few months ago, they launched the Seagull at $11,500,” Michael Dunne, CEO of Dunne Insights, told CNBC. “You have to double that price and then get an entry-level car here in the U.S. and Europe. So it's very competitive in the $35,000-and-under category.”
BYD is now aggressively expanding globally, exporting more than 240,000 vehicles across 70 countries last year. It has announced plans to establish a European factory in Hungary, and is reportedly looking for sites in Mexico.
“They are definitely preparing for the US market, waiting for the right timing,” Don said. “The United States and Europe are a lucrative market for them. They have to enter, compete and win here to thrive globally.”
Watch the video to learn how BYD evolved from battery maker to electric vehicle giant and what's next for the company.
